Luton v Lessels

Case [2002] HCA 13

HIGH COURT OF AUSTRALIA

GLEESON CJ,
GAUDRON, McHUGH, KIRBY, HAYNE AND CALLINAN JJ

ANTHONY IAN LUTON  PLAINTIFF

AND

GILLIAN GLADYS LESSELS & ANOR  DEFENDANTS

Luton v Lessels
[2002] HCA 13
11 April 2002
C40/1995

ORDER

Answer questions as follows:

Question 1

Is the scheme established by the Child Support (Registration and Collection) Act 1988 (Cth) and the Child Support (Assessment) Act 1989 (Cth) for the collection and payment by the second defendant of money otherwise payable to or receivable by the first defendant a tax?

Answer

No.

Question 2

If "Yes" to question 1 are the Acts invalid as being contrary to s 55 of the Constitution?

Answer

Unnecessary to answer.

Question 3

Do the Acts in purporting to authorise the second defendant to make the assessments and the determinations, to enter the particulars, to issue the notices, and to collect and apply payments in the way in which the second defendant did involve the purported exercise of judicial power by the second defendant contrary to Ch III of the Constitution?

Answer

No.

Question 4

What orders for the further disposition of the action should be made in the light of the answers to these questions?

Answer

The action should be dismissed with costs, including the costs of the case stated under s 18 of the Judiciary Act 1903 (Cth).

Representation:

G C Corr with G K Y Wong for the plaintiff (instructed by Tjakamarra-Forrest)

No appearance for the first defendant

D M J Bennett QC, Solicitor-General of the Commonwealth with C J Horan for the second defendant (instructed by Australian Government Solicitor)

B M Selway QC, Solicitor-General for the State of South Australia with A S Field intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor for South Australia)

R M Mitchell intervening on behalf of the Attorney-General for the State of Western Australia (instructed by Crown Solicitor for Western Australia)

Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Luton v Lessels

Constitutional law (Cth) – Taxation – Law imposing taxation – Statutory power to register a parent's or step-parent's child maintenance liability – Validity – Whether amounting to law imposing taxation – Whether law deals only with the imposition of taxation.

Constitutional law (Cth) – Judicial power of Commonwealth – Child Support Registrar may assess child support payable by parent or step-parent under statute – Validity – Whether impermissible conferral of the judicial power of the Commonwealth upon Registrar.

Words and phrases – "laws imposing taxation".

Constitution, ss 53, 55, 71.
Child Support (Assessment) Act 1989 (Cth), Pts 5, 6A.
Child Support (Registration and Collection) Act 1988 (Cth), Pt III.

  1. GLEESON CJ.   The plaintiff has commenced proceedings in this Court challenging the validity of the Commonwealth's legislative scheme for assessment and enforcement of child support liabilities.  The scheme is contained in the Child Support (Assessment) Act 1989 (Cth) ("the Assessment Act") and the Child Support…

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Luton v Lessels [2002] HCA 13
Case
[2002] HCA 13
Decision Date

CaseChat Overview and Summary

The High Court of Australia considered the validity of the Child Support (Registration and Collection) Act 1988 (Cth) and the Child Support (Assessment) Act 1989 (Cth) in a case stated by the parties, Mr Anthony Luton (the plaintiff) and Ms Gillian Lessels (the first defendant), with the Child Support Registrar as the second defendant. The dispute arose from the assessment and collection of child support payments for a child born from the plaintiff and first defendant's relationship. The plaintiff challenged the legislation on two grounds: first, that it constituted a law imposing taxation that did not comply with section 55 of the Constitution, and second, that it impermissibly conferred the judicial power of the Commonwealth on the Child Support Registrar.

The court was required to determine whether the scheme established by the Acts for the collection and payment of child support constituted a tax, and if so, whether it contravened section 55 of the Constitution. Additionally, the court had to consider whether the powers conferred upon the Child Support Registrar to make assessments, enter particulars, issue notices, and collect and apply payments amounted to an invalid exercise of judicial power contrary to Chapter III of the Constitution.

The High Court rejected both of the plaintiff's contentions. The court held that the scheme established by the Acts was not a tax, and therefore, the question of its validity under section 55 of the Constitution was unnecessary to answer. Furthermore, the court found that the powers exercised by the Child Support Registrar did not constitute an impermissible conferral of judicial power, concluding that the Acts were valid. Consequently, the court ordered that the action be dismissed with costs.

Orders

Orders of the court

Answer questions as follows:

Question 1

Is the scheme established by the Child Support (Registration and Collection) Act 1988 (Cth) and the Child Support (Assessment) Act 1989 (Cth) for the collection and payment by the second defendant of money otherwise payable to or receivable by the first defendant a tax?

Answer

No.

Question 2

If "Yes" to question 1 are the Acts invalid as being contrary to s 55 of the Constitution?

Answer

Unnecessary to answer.

Question 3

Do the Acts in purporting to authorise the second defendant to make the assessments and the determinations, to enter the particulars, to issue the notices, and to collect and apply payments in the way in which the second defendant did involve the purported exercise of judicial power by the second defendant contrary to Ch III of the Constitution?

Answer

No.

Question 4

What orders for the further disposition of the action should be made in the light of the answers to these questions?

Answer

The action should be dismissed with costs, including the costs of the case stated under s 18 of the Judiciary Act 1903 (Cth).

Background

Background to the litigation

The first question concerns the validity of the Acts, it being contended that they amount to "laws imposing taxation" within the meaning of s 55 of the Constitution and do not comply with the requirements governing laws of that character. The second is whether, by purporting to authorise the Child Support Registrar ("the Registrar") to make assessments and determinations, enter particulars, issue notices and collect and apply payments, the Acts invalidly attempt to confer on the Registrar the judicial power of the Commonwealth, contrary to the requirements of Ch III of the Constitution. The facts and issues Mr Anthony Luton ("the plaintiff") and Ms Gillian Lessels ("the first defendant") began to cohabit in a de facto relationship, in about November 1991. They never married. In August 1992 cohabitation ceased. In February 1993, a child was born as a consequence of their relationship. The legislative provisions governing the financial support of that child have given rise to the present controversies. In July 1993, the first defendant applied to the Registrar (the second defendant) for an assessment under the Assessment Act and registration of a child support arrangement under the Registration and Collection Act. In August 1993, the Registrar made an assessment of the liability of the plaintiff to pay child support. Pursuant to the Registration and Collection Act, the Registrar registered a registrable maintenance liability that arose as a result of such assessment[101]. In October 1994, the Registrar amended that assessment[102] and varied the commencement date after which the plaintiff had to pay child support. The particulars entered in the Child Support Register were amended to conform to this variation[103].[101]Registration and Collection Act, s 24A.[102]Assessment Act, s 75.[103]Registration and Collection Act, s 37A. There followed applications and counter-applications to the Registrar. In December 1993, the first defendant applied for a "departure" from the assessment previously made, so as to increase the rate of child support payable[104]. In February 1994 the plaintiff, by way of reply to the first defendant's application, sought a reduction in the child support payable[105].[104]Assessment Act, s 98B. A number of grounds are set out in the Assessment Act, s 117.[105]Assessment Act, s 98G(2). In April 1994 a Child Support Review Officer, acting as a delegate of the Registrar, made assessments of the child support income payable[106] for the period 1 January 1994 to 30 June 1994, for the ensuing year and subsequent years. The Registrar entered particulars of the assessments in the Child Support Register[107]. [106]Assessment Act, s 98C.[107]Registration and Collection Act, s 37A. The Registrar has enforced collection of the amounts payable by the plaintiff in various ways, including by issuing notices to the plaintiff's employers to make deductions from his salary[108]. In accordance with such notices, the plaintiff's employers have made periodic deductions of that kind[109] and have paid the amounts to the Registrar[110]. The Registrar has also applied an amount owing by the Commonwealth to the plaintiff under the Income Tax Assessment Act 1936 (Cth) in reduction of the debt due by the plaintiff to the Commonwealth[111]. By inference, the Registrar has paid the sums so received to the first defendant, who has the care and custody of the child.[108]Registration and Collection Act, s 45(1) and (2).[109]Registration and Collection Act, s 46.[110]Registration and Collection Act, s 47.[111]Registration and Collection Act, s 72.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

GLEESON CJ GAUDRON AND HAYNE JJ HUGH J KIRBY J
This ground of challenge to the validity of the legislation fails.Conclusion The questions should be answered as follows:1.Q. Is the scheme established by the Child Support (Registration and Collection) Act 1988 (Cth) and the Child Support (Assessment) Act 1989 (Cth) for the collection and payment by the second defendant of money otherwise payable to or receivable by the first defendant a tax?A. No.2.Q. If "yes" to question 1 are the Acts invalid as being contrary to s 55 of the Constitution?A. Unnecessary to answer.3.Q. Do the Acts in purporting to authorise the second defendant to make the assessments and the determinations, to enter the particulars, to issue the notices, and to collect and apply payments in the way in which the second defendant did involve the purported exercise of judicial power by the second defendant contrary to Ch III of the Constitution?A. No.4.Q. What orders for the further disposition of the action should be made in the light of the answers to these questions?A. The action should be dismissed with costs. The questions for consideration of the Full Court concern the validity of the Child Support (Registration and Collection) Act 1988 (Cth) ("the Registration and Collection Act") and the Child Support (Assessment) Act 1989 (Cth) ("the Assessment Act"). The plaintiff contends that the former of these Acts is a law imposing taxation which, contrary to s 55 of the Constitution, does not "deal only with the imposition of taxation". The plaintiff further contends that both Acts, impermissibly, purport to vest the judicial power of the Commonwealth in the Child Support Registrar ("the Registrar"), an office established by s 10 of the Registration and Collection Act. Both contentions should be rejected. The questions reserved are couched in the present tense and, therefore, invite attention to the Acts in the form in which they now stand. Since their enactment, both Acts have been amended several times but it was not submitted that anything turned on those amendments or on the particular form that the Acts took at the date of the various events described in the case stated. It is, therefore, convenient to refer to the principal features of the Acts as they now stand.The Registration and Collection Act The Registration and Collection Act (originally enacted as the Child Support Act 1988) commenced operation on 1 June 1988. Its principal objects[18] include ensuring:"(a)that children receive from their parents the financial support that the parents are liable to provide; and(b)that periodic amounts payable by parents towards the maintenance of their children are paid on a regular and timely basis".[18]Registration and Collection Act, s 3(1). Part III of the Registration and Collection Act (ss 17‑42B) provides for the registration of certain liabilities of a parent, or step‑parent, of a child to pay a periodic amount for the maintenance of the child. A person liable to make such payments is referred to in the Registration and Collection Act as "the payer". Section 17 identifies what is a registrable maintenance liability and Div 2 of Pt III (ss 20‑32) provides for the registration of such liabilities. Section 30 of the Registration and Collection Act provides that, if a registrable maintenance liability is registered, first, the amounts payable "are debts due to the Commonwealth by the payer in accordance with the particulars of the liability entered in the Child Support Register" and, secondly, "the payee is not entitled to, and may not enforce payment of, amounts payable under the liability". Registered maintenance liabilities that are enforceable under the Registration and Collection Act are called "enforceable maintenance liabilities"[19]. An amount that is a debt due to the Commonwealth under s 30 is called a "child support debt"[20].[19]s 4.[20]s 4.

Ratio Decidendi

Legal Principle Established

Established by: GLEESON CJ, GAUDRON AND HAYNE JJ, HUGH J, KIRBY J

The questions reserved are couched in the present tense and, therefore, invite attention to the Acts in the form in which they now stand. Since their enactment, both Acts have been amended several times but it was not submitted that anything turned on those amendments or on the particular form that the Acts took at the date of the various events described in the case stated. It is, therefore, convenient to refer to the principal features of the Acts as they now stand.The Registration and Collection Act The Registration and Collection Act (originally enacted as the Child Support Act 1988) commenced operation on 1 June 1988. Its principal objects[18] include ensuring:"(a)that children receive from their parents the financial support that the parents are liable to provide; and(b)that periodic amounts payable by parents towards the maintenance of their children are paid on a regular and timely basis".[18]Registration and Collection Act, s 3(1). Part III of the Registration and Collection Act (ss 17‑42B) provides for the registration of certain liabilities of a parent, or step‑parent, of a child to pay a periodic amount for the maintenance of the child. A person liable to make such payments is referred to in the Registration and Collection Act as "the payer". Section 17 identifies what is a registrable maintenance liability and Div 2 of Pt III (ss 20‑32) provides for the registration of such liabilities. Section 30 of the Registration and Collection Act provides that, if a registrable maintenance liability is registered, first, the amounts payable "are debts due to the Commonwealth by the payer in accordance with the particulars of the liability entered in the Child Support Register" and, secondly, "the payee is not entitled to, and may not enforce payment of, amounts payable under the liability". Registered maintenance liabilities that are enforceable under the Registration and Collection Act are called "enforceable maintenance liabilities"[19]. An amount that is a debt due to the Commonwealth under s 30 is called a "child support debt"[20].[19]s 4.[20]s 4. Part IV of the Registration and Collection Act (ss 43‑65) provides for the collection of amounts due to the Commonwealth for enforceable maintenance liabilities. If the payer is an employee, the general rule is that, as far as practicable, the amount will be collected by deduction from the payer's salary or wages[21]. Provision is made for the Registrar to give notice to the employer of such a payer[22] instructing the employer to make periodic deductions from salary or wages paid by the employer to the payer. Section 46 obliges the employer to make the necessary deductions; s 47 requires the employer to pay to the Registrar the amounts deducted. An amount payable to the Registrar under Pt IV of the Act (including, therefore, an amount payable under s 47) is a debt due to the Commonwealth[23]. Until the amendment of the Registration and Collection Act in 2001[24], the Registrar was the Commissioner of Taxation[25] and each Second Commissioner and Deputy Commissioner of Taxation was a Deputy Child Support Registrar[26]. The amending legislation provided that the Registrar was to be "the person who holds, or is acting in, the position known as the General Manager of the Child Support Agency", or if there is no such position, the person holding, or acting in, a position specified by the Secretary of the Department of Family and Community Services.[21]s 43.[22]s 45.[23]s 64.[24]Child Support Legislation Amendment Act 2001 (Cth), Sched 5, Item 38.[25]Registration and Collection Act, s 10(2).[26]s 12.